American Express has linked up with Global Payments (AXP)

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American Express and Global Payments Inc., the US-based payment processor, announced an agreement that will enable Global Payments to deliver payment solutions, including processing, settlement, and reporting services, to American Express small merchants in the UK.

The move is likely another effort by Amex to build its small business and international segments, which have become increasingly important in the wake of the firm's Costco portfolio sale. For context, the Costco portfolio represented 8% of the firm's $1 trillion billed business in 2015. 

Amex has been reaching into small businesses in a number of ways as part of a move to grow.

• OptBlue: Amex has been working to extend relationships with small businesses through its OptBlue program, which makes it easier for these merchants to accept and use Amex cards. That program has been successful, and the firm has seen growing billed business among small- and medium-sized merchants.
• Working Capital Terms program: Amex is offering small businesses an opportunity to loans through its relatively new financing option. Working Capital Terms loans range from $1,000 to $750,000 and are approved within a minute with no need for collateral. By giving merchants more than just traditional payment options, Amex can attract more business users. 

The move could help Amex use international gains as a way to grow and catch up. Amex has been pushing global small business initiatives to get wider acceptance, which could give it a more diverse portfolio and added revenue streams. This includes extending its OptBlue service into Canada, forging partnerships to bring Amex to small business merchants in Mexico and Germany, and even becoming a partner with Apple Pay to offer the service in Australia.

By partnering with Global Payments, Amex is building a relationship with a major global payment processor that could expand Amex's reach much further — Global Payments operates in over 38 countries, processing billions of transactions for over 1 million merchant locations. And that could help the firm in a broader sense as well, since Amex is dwarfed by competitors like Visa and MasterCard in terms of its share of global payment volume.  

Amex is a heavyweight in the payments ecosystem, but there are still dozens of other moving parts such as acquirers, merchants, processors, and more that make up that ecosystem.

Evan Bakker and John Heggestuen, analysts at BI Intelligence, have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as well as revealing which types of companies are in the best and worst position to capitalize on the latest industry trends.

Here are some key takeaways from the report:

• 2016 will be a watershed year for the payments industry. Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices.
• Payments is an extremely complex industry. To understand the next big digital opportunity lies, it's critical to understand how the traditional credit- and debit-processing chain works and what roles acquirers, processors, issuing banks, card networks, independent sales organizations, gateways, and software and hardware providers play.
• Alternative technologies could disrupt the processing ecosystem. Devices ranging from refrigerators to smartwatches now feature payment capabilities, which will spur changes in consumer payment behaviors. Likewise, blockchain technology, the protocol that underlies Bitcoin, could one day change how consumer card payments are verified.

In full, the report:

• Uncovers the key themes and trends affecting the payments industry in 2016 and beyond.
• Gives a detailed description of the stakeholders involved in a payment transaction, along with hardware and software providers.
• Offers diagrams and infographics explaining how card transactions are processed and which players are involved in each step.
• Provides charts on our latest forecasts, key company growth, survey results, and more.
• Analyzes the alternative technologies, including blockchain, which could further disrupt the ecosystem.

To get your copy of this invaluable guide, choose one of these options:

1. Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
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